TREASURIES-Bonds up on weaker-than-forecast Q2 GDP

* Q2 GDP slightly weaker than expected at 2.4 percent

* Weaker stocks revive bid for safe-haven U.S. govt debt

* July Chicago PMI reads 62.3, higher than forecast

* Some skepticism greets Chicago PMI rise (Updates prices, adds comment after Chicago PMI)

By Ellen Freilich

NEW YORK, July 30 (Reuters) - A weaker-than-forecast report on U.S. growth last quarter and equity market losses revived the bid for safe-haven U.S. government debt, pushing prices of U.S. Treasuries higher and yields lower.

Gross domestic product grew at a 2.4 percent annual rate, the government said in its first estimate, after a revised 3.7 percent growth pace in the January-March quarter.

Equity markets weakened in response to the news, helping to whet investors' appetite for safe-haven U.S. government debt.

The benchmark U.S. 10-year Treasury note US10YT=RR was up 14/32 in price, its yield easing to 2.93 percent from 2.99 percent late on Thursday.

The 30-year Treasury bond US30YT=RR was up 1-10/32, its yield easing to just below 4 percent from 4.08 percent on Thursday.

"(The GDP report was) bond positive because slower growth and consumer spending going forward will mean weaker inflationary pressure," said Lee Olver, managing director of Financial Strategies at Madison Williams & Co in Houston.

In fact, the near absence of inflationary pressure has become troubling to the Federal Reserve, persuading even some heretofore inflation hawks to warn about a Japanese-style deflationary outcome.

St. Louis Federal Reserve Bank President James Bullard said on Thursday he was worried about the risks the United States could fall into a Japan-style quagmire of falling prices and investment that is hard to get out of and said the U.S. quantitative easing program offered "the best tool to avoid such an outcome."

The Treasury market also completed three note auctions this week, temporarily relieving it of the potential pressure of having to absorb new supply.

U.S. economic growth slowed in the second quarter as a capital investment drive by businesses saw imports increasing at their fastest pace since the first quarter of 1984.

The New York ISM also said New York City business activity fell in July from its June level.

The July Chicago purchasing management index showed business activity in the U.S. Midwest grew more than expected, news that typically would have caused bonds to cut gains.

But Tom Porcelli, U.S. economist at RBC Capital Markets in New York, expressed some skepticism about the report.

"GM in particular decided to forego the big seasonal increases in layoffs for retooling. It's entirely possible that the seasonal factors (in the Chicago PMI) made an overadjustment. The same theory applies to all the indexes--new orders were up, employment was up -- but you've got to take it all with a grain of salt."

Porcelli said the GDP report had already set the market's tone early in the morning.

"People are cognizant of the headwinds," he said. "This (Chicago PMI) is one data point among several that is telling a different story."

The Thomson Reuters/University of Michigan Surveys of Consumers' final July consumer sentiment index rose to 67.8 from 66.5 in the preliminary July reading, according to a report released on Friday, evoking scant market reaction.

(Additional reporting by Emily Flitter, Richard Leong) (Editing by Theodore d'Afflisio)